O'Chiese band billed for routine work by council members' company
Conflict of interest concerns raised on oil-rich First Nation in central Alberta
The late chief of O'Chiese First Nation and his brother, a current band councillor, are listed as the owners of a company that has been routinely hired by band-owned businesses to do work on the central Alberta reserve, according to documents obtained by CBC News.
It's an arrangement that has raised concerns among members of the oil-rich First Nation and, according to a lawyer who specializes in government ethics, has the hallmarks of a textbook case of conflict of interest.
Seven-time chief Darren Whitford, who died in December, and Coun. Cedric Whitford are listed as the only two shareholders of White Buffalo Maintenance and Equipment Services.
Darren was listed as owning 51 per cent of the voting shares and Cedric the other 49 per cent, according to the company's corporate registration.
White Buffalo often does work on O'Chiese, according to numerous residents of the First Nation, which is located about 50 kilometres northwest of Rocky Mountain House in an area that has seen a recent resurgence in oil exploration.
O'Chiese First Nation owns more than a dozen business enterprises that create revenue for the band and provide jobs for members. Together, their annual budgets total in the tens of millions of dollars.
Residents have been concerned for years about the close relationship between those enterprises and White Buffalo, according to band members who spoke with CBC News, but many have been afraid to speak out against the chief and his brother.
"A lot of people are afraid that their benefits would get cut off," said band member Adrian Strawberry.
"Some of them have jobs. A lot of them have housing. Some of their family members ... had jobs with the band and they were very scared of jeopardizing that for them by speaking out."
The issue, Strawberry said, is that the chief and council wield too much control over both the business operations and the political and social affairs of the First Nation.
"They sit as the board of directors of the companies. They make the final decisions," he said. "And, of course, as chief of council on the other end — the political side — they have full control of everything. They decide who gets the house, who gets the job, all of that stuff."
Strawberry tried to run for chief, himself, last year but had his candidacy suddenly revoked under disputed circumstances. Part of his reason for running, he said, was to remove council members from their roles with the band-owned companies and have independent directors appointed instead.
"I wanted to separate the politics from the business," he said.
White Buffalo bills band-owned businesses
CBC News has obtained a book of field tickets issued by White Buffalo, billing two band-owned business entities for tens of thousands of dollars' worth of equipment and labour.
The book contains 22 tickets billing O'Chiese Contracting for $31,725 between December 2015 and June 2016 for vehicle and equipment rentals and various types of labour.
It also contains one ticket billing $10,620 to "Enterprise 203" for the 90-day rental of a dump trailer.
O'Chiese Contracting and a pair of companies named Enterprise 203 Construction and Enterprise 203 Holdings are among the various commercial enterprises owned by the band.
They list the chief and council members — including Darren Whitford and Cedric Whitford — as their corporate directors and as equal voting shareholders "in trust for" O'Chiese First Nation.
'Blatant conflict of interest'
Ian Stedman, a lawyer who specializes in government ethics at York University's Osgoode Hall Law School, said a business arrangement like this is typically problematic for elected officials.
"In the context of municipal or provincial or even federal government, it's a blatant conflict of interest for a government — no matter what level — to give contracts to companies owned by members of that government," he said.
He noted there can be mitigating circumstances in smaller communities where it's difficult to find alternative contractors but in those cases governments should disclose that they are hiring companies owned by elected officials because they have no other choice.
With respect to First Nations, specifically, he also said there has been an "evolution" in how these types of arrangements are handled — and viewed.
"It may be that this is a company than someone has risked, themselves, to create, to help create jobs for others in the community. And so, [the thought is,] we're going to keep the money within the community as much as we can," Stedman said.
"This may never have been a conversation in that band before, about what a conflict is."
'They're still scared'
Another band member, Darren Bradshaw, says those conversations are happening — but not publicly.
In private circles, he said he's heard numerous people raise concerns about White Buffalo's work for band-owned businesses but few are willing to be seen as crossing the chief and council.
"They're still scared. They're still intimidated. They're still worried about their families," he said.
"But they want change. They want change to come."
Bradshaw, himself, does work as a heavy-duty mechanic and welder but says he's seen job opportunities dry up on O'Chiese, which he believes is related to his criticism of band council members.
He says he now has to travel abroad to make a living.
"I have to go as far down as Texas and Pennsylvania to work," he said.
What do the band-owned businesses do?
O'Chiese Contracting and Enterprise 203 Holdings are part of a group of band-owned companies that comprise the O'Chiese Business Centre.
The business centre's stated mandate is to provide employment to O'Chiese members, foster economic development on the reserve and to be "a profit-driven organization working to ensure each company's success."
The contracting arm works with oil-and-gas companies doing business on O'Chiese land. The real-estate holding company provides rental housing to O'Chiese members living off-reserve. Other enterprises include a gas bar, truck stop, various oilfield services and a forest management agency.
O'Chiese First Nation also owns a utility, a gaming corporation, a communications company and a land development corporation.
All told, the 17 band-owned enterprises spent $29.5 million and brought in $31.1 million in revenue in the last fiscal year, according to the First Nation's financial statements.
The O'Chiese First Nation had 1,401 registered members as of November, according to the federal government, with 906 living on the reserve.
Chief's death and councillor's no comment
CBC News reached out to both Darren and Cedric Whitford for comment in December but learned they would be unavailable for comment as Darren was seriously ill in hospital.
He died Dec. 13.
Reached this week, Cedric Whitford declined an interview request regarding White Buffalo's relationship to the band-owned businesses.
"Have no comments," he said in a text message.
The band's general counsel, Connie Tuharsky, did not reply to interview requests this week.
O'Chiese First Nation has yet to select a new chief.
A notice posted on the band's website says a community meeting will be held on Feb. 28 "to discuss the decision that needs to be made together on moving forward."